Source: Zimbabwe Turns to ‘Task Force’ in Bid to End Currency Rout – Bloomberg
- Gap between official and parallel exchange widens two-fold
- Electronic trading system to be adopted effective immediately
Zimbabwe will set up a currency stabilization “task force” in a new attempt to end a rout that’s seen the local unit weaken more than 50% against the U.S. dollar on the parallel market in the past two weeks.
Even having one of the world’s highest central-bank interest rates hasn’t helped to curb exchange-rate volatility amid weak economic growth and triple-digit inflation.
The currency team will be jointly run by the finance ministry and the central bank, Finance Minister Mthuli Ncube told reporters in the capital, Harare, on Wednesday. It will also include members from the bank’s monetary policy committee and the presidential advisory council.
“The task force will meet at least once a week to review the conditions in the markets, monitor the behavior of key variables such as the exchange rate and inflation,” said Ncube, who will be its chairman.
An electronic foreign-exchange system that was also unveiled Wednesday, will start operating on Monday, according to the Reserve Bank of Zimbabwe.
It was due to start immediately, but banks had requested more time “and we still have to formally adopt the rules for the market and the bureaus,” Eddie Cross, a member of the central bank’s monetary policy committee, said in a text message. Fifteen lenders have indicated they will use the platform, Cross said.
The gap between the currency’s official and black-market rates has widened more than twofold. The Zimbabwe dollar slid to 41.5 per U.S. dollar on the black market Thursday, according to marketwatch.co.zw, a local website, while the official exchange rate is 18.3. The central bank kept its key rate unchanged at 35% last month, and annual inflation is estimated at more than 500%.
COMMENTS
The day that Zimbabwe comes right will be the day when Ian Smith is resurrected.
Complete and utter fools thinking that anybody can control the Black Market in currency exchange. If a government creates distorted exchange rates then this is exactly what they should expect and of course they already know it. But some stupid idiot in the dictatorship no doubt put up to it by another idiot in same dictatorship think that they can control which nobody has EVER managed before. Long live the wonderful Dictatorship.
the artificial exchange rate managed by the RBZ is a deliberate strategy for looting. If you are “connected” you buy USD at official rate. If not connected, you will only find USD on the streets..
Zanu PF has been using this strategy to get rich very quickly for a long time.
Remember how quickly the ditched the US$ stable economy that was put in place during the Government of National Unity, and rushed back to having a Zim currency, which they called a United States Dollar US$ —
Corruption and abuse were then back in fashion with the elite.
Has been like this for over 50 years Bond !
Most currencies in Africa & middle east run like this
Long live our beloved Dictatorship. Always taking care that their subjects are suppressed. The elite shall prosper.